April 2011 Archives

Social Vending, TV Ad Tagging & Marketing Convergence

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socialvending_a.jpgEarlier this week PepsiCo announced the Pepsi Social Vending machine which allows consumers to interact with a vending machine in unique, digitally enabled way. You can gift a drink to a friend in your social network who'd get redemption code by text and use it to pick up their soda at any other social vending machine. And you can also gift a soda to an stranger in another city as a gift. The vending machine also displays Pepsi Refresh Project ideas.

The week before we launched the first of its kind IntoNow Pepsi Max tagging experiment letting consumers tag our MLB advertisements and receive a coupon reward in return that can be redeemable in retail. These two very different announcements may have nothing in common on the surface, but that couldn't be further from the truth.

The promise of convergence is quickly becoming a reality. Our consumers do not live in digital worlds that are separate from their physical realities (interestingly, this was my key message at the Ad Age Media Maven awards two years ago). Nor do they treat televisions as a technology independent and separate from computers or mobile phones. Those worlds are blurring and brands must respond to that. With that in mind, here are some thoughts that I believe will influence marketing over the next decade.

  1. Every device and product can be a connected device. Connect your devices. This may seem like a cliché but the truth is so far very few devices are truly connected ones. That's all about to change. For us at Pepsi, we recognize that our fountains, vending machines, cans, bottles and even trucks are fundamentally media. In more and more scenarios they can also be interactive media that can be linked to the digital world. That's where the Pepsi Social Vending machine enters the picture. A hyper-local physical product is your connection to your global, social graph.

  2. Television advertising is dead as television advertising. There's no shortage of column inches dedicated to the death of television advertising. But that misses the point. The fundamentals of television advertising are changing dramatically. No more can you think about it in isolation. Rather your television advertisement is the trailer for deeper online engagement or as in the case with the Into Networks experiment, the access point to specific experiences that could be coupon, game or content centric. Creatives need to think about TV through a different lens - through the lens of it being one touchpoint in a broader consumer engagement strategy. Never start with a TV campaign.

  3. People must be at the center of every business. Make it happen. This is another one that may sound like a cliché but demands mention. In business we often put the wrong words at the heart of our thinking (for my business it maybe consumption, for an airline its seats and for a publisher its audiences), where as at the heart of every business need to be the people who don't just consume the product but also badge it, talk about it, frame experiences around it and choose to bring it into their lives either themselves or through their networks. The Social Vending machine takes us in that direction with the gifting opportunities. It is fundamentally about focusing on fun things people would want to do versus just on ways to sell more of a product efficiently.

  4. Digital Innovation is table stakes for any brand that desires relevance. Since my joining PepsiCo Beverages, we've conducted more tests and launched more proof of concepts than we can barely support. We do this because we recognize that technology is having dramatic effects on how our consumers associate with brands, make purchase decisions collaboratively and consume our products. Everyday we're researching and testing. The benefit - we get to learn quickly what works and what our consumers care about. That maks a big difference. However, betting on the right horses is hard. Success isn't just about experimenting a lot, it is also about placing strategic bets otherwise you dilute your brand's equity. Betting on the right horses will get harder. If tagging TV commercials doesn't take off, we may look stupid a year or two from now. On a side note, IntoNetworks was bought by Yahoo a day after we launched our experiment. That's an endorsement of the technology.

  5. Metrics need to be much more sophisticated. We like to believe that we're entering an age where everything can be measured. That couldn't be further from the truth. The technological and cultural changes we are experiences far outpaces evolutions in marketing measurement. We need to learn so much more about what drives behavior, how the dynamics of influence work and what marketing activities (technological or otherwise) truly influence sales. Currently, those metrics are relatively simplistic and the organizations that invest in measurement in proprietary ways will get ahead. With both the social vending and the tag an advertisement efforts, the metrics will need to be very different. We have no benchmarks or models to work off.

  6. Engagement must be the mantra through real-time marketing. There's no doubt in my mind that thinking of marketing as the search for the next big idea is going to seem trite and superficial a few years from now. Momentum for a big brand won't come from creating splash in Times Square alone and then getting media to surround it. Nurturing continuos, culturally relevant relationships that connect the brand's meaning with consumer intent in the context of their cultural groups will be what matters. The operative word is continuous.
Look at your marketing calendar and ask yourself, are you truly creating continuous relationships with your consumers? Everyday, that social vending machine should have different, experiences that are synchronized with how we're communicating to our consumers digitally, in retail and through trade promotions. Will it get there? Yes. The same applies for tagging an advertisement, the engagement should change by the day based on what's going on in the real world and what the brand is trying to accomplish.

    This couldn't be a more exciting time to be in marketing and the thoughts above reflect just some of the transformations that companies are going through. There's a lot more to come but I thought I'd share some of the factors that influence what we do in the marketplace and why.

    Will you tie bonuses to Facebook fan counts?

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    In the last year people have begun to associate the number of likes/fans that a brand has on Facebook with its social media savviness. Some even consider it to be a broader measure of brand health. At the rate we're going, soon corporate bonuses maybe tied to Facebook fan counts! Is that a good thing? I don't think so and here's five reasons why.

    1. Fan count is not a measure of engagement. A few weeks ago, I stumbled upon a surprising fact concerning one of the brands that I have to worry about in my day job. While brand Pepsi has  fewer Facebook fans than some other brands like Starbucks, it has as much forms of engagement online but outside of Facebook.

      How could this be? Here's how. The Pepsi Refresh Project which has been a really successful digital program for Pepsi has an average of 20,000 comments published on the site everyday when it is in session. This is as much engagement than practically any brand on Facebook has on its Facebook page irrespective of the size of its fan base. So what's more important - the Facebook fan count or the deeper engagement around conversations? Arguably, conversations alone don't equal engagement but it does show that the number of fans isn't the right metric alone either. These metrics need to be considered as signals only.

    2. Liking a page is a onetime activity that's then forgotten by many. Shut your laptop and ask yourself this question. How many brands have you "liked" on Facebook in the last year? Do you remember all of them, any of them? The truth is that we don't. And what's even more interesting is that when a brand publishes a status update barely 10% of its fans sees that update. 

      That's one reason why Facebook launched its Sponsored Stories ad product to promote brand status updates within Facebook so that more people see them. They fully acknowledge that not everyone will see a particular message in the newsfeed. Facebook fans represent the affinity that a person has to a brand in a particular moment of time and not in an aggregated, continuous fashion. It is very different to monthly engagement, traffic or time spent. If we were asked to re-like pages every week or every month, it would be another story but that's not the case.

    3. Facebook Fans can be bought. Some brands buy fans every month. You want to know the truth? The going rate for fan acquisition is roughly $0.60 to $1.00 per fan. If I wanted to create the largest brand page on Facebook, I could do that quickly by just spending. I could  use a large percentage of a digital media budget to buy those fans. It'll take probably two weeks but I would have the largest Facebook brand page in no time. Does it mean that I have the most popular brand online or that I'm the most social media savvy marketer out there? Of course not. It just means that I have a very large budget.

      This shows that anyone who tries to equate Facebook fan counts with social media success is ignoring the fact that fan counts aren't a pure organic endorsement of a brand. By putting the brand in front of more people on Facebook via its advertising solutions (or third party ones built on the Facebook marketplace that are designed to drive fan increases) you can quickly scale up your fan count. That's why we see spikes in the number of fans a brand has from time to time, it is because they're doing special advertising to acquire them. There's nothing wrong in that, what's wrong is when we equate Facebook fan count with overall health of the brand and assume that it is all organically grown.

    4. Facebook fan counts don't represent true consumer opinion. We don't pay enough attention to semantics as we should sometimes. The acting of "fan-ing" or "liking" a page doesn't necessarily mean that the user is choosing that brand over all others out of pure fondess. He may in fact be liking the page because it'll give him the opportunity to participate in a sweepstakes or get access to special content. In fact, with the ability to "gate" pages (meaning you don't see what the brand has to offer unless you like the page) the user could have a completely different motivation that's driving him to like the page than affinity for the brand itself. For example, in the case of The New Yorker, he may like the page so that he gets access to a specific article that's being shared on the page. Jet Blue ran a special promotion encourage people to like their page to enter sweepstakes that gave away free tickets. Not surprisingly, their fan count grew dramatically during that period.

      Instead metrics like the SIM Score (which I introduced in Fluent and my book a few years ago) are a more accurate representation of digital brand health. Metrics like the SIM Score measure opinion online around a brand but also account for reach and puts it in the relative context of its competitors. They're not perfect themselves but they're a step in the right direction.

    5. History plays a significant role in Facebook fan counts. What's sometimes forgotten in the digital space is that first move advantage is truly a massive advantage. Brands that developed Facebook Pages early on or better still those that had existing Groups (before the pages were setup) that were then migrated to pages are at a significant advantage. Also, in the early days of Facebook Pages, users truly liked brands as a show of support. There was no "gating", strategic incentives and very little advertising designed to increase the number of fans. Those brands who were smart enough to be on Facebook and in strategic ways early on are some of the ones that are reaping the benefits. Furthermore, brands that went the route of taking over user groups, started off with an in built base that helped them significantly.

      Again, there's nothing wrong with this but it does go to show that simply equating fan counts with brand health or social media savviness is simplistic. There are many more factors at play.  

    So where does this leave us? In my opinion, Facebook fans is not a measure of online brand health or social media savviness. It is also a factor of budgets, consumer incentives, history, what else the brand is doing online and where it is choosing to focus its efforts. If you're thinking of tying bonuses to Facebook fan counts, I'd suggest you think twice. While the thought may seem preposterous to many of us, it is something that a few people have wondered about. 

    It is far more important to think strategically and holistically about the health of your brand online and how you are engaging consumers. Yes, Facebook is very important especially in the opportunity it provides to engage with your consumers on a daily basis in light, continuos ways. But depending upon your objectives it may make sense to be the core focus (and that too with fan counts versus page engagement) or it may not. Only you can make the judgement call of what matters to your digital strategy and broader business objectives. Just as you shouldn't judge a book by its cover, you probably shouldn't judge a brand by its Facebook fan count.

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